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MUNCHEN UNIVERSITY:
12 Accordingly, the Contract defines the respective obligations for CLAIMANT and
RESPONDENT. Thiscorresponds with the general nature of a sales contract pursuant to which
the seller is bound to deliver the goods and the buyer is obliged to pay the purchase price and
accept the goods (MISTELIS in: Kröll et al. Art. 1 § 25). Global Minerals, however, is not
mentioned in a single provision of the contract and therefore does not incur any obligations
(Proc. Order No. 2 § 17).
13 Thus, Mr Winter and Mr Summer signed for the seller and the buyer respectively, whereas
Mr Storm (Global Minerals) did not sign as a contracting party (Cl. Exh. C 1). Consequently,
Global Minerals is not automatically bound by the arbitration clause contained in the Contract.
2. Global Minerals Did Not Express Any Intention to Become a Party to the Contract
14 Art. 1 of the Contract is in line with Global Minerals’ conduct, which has to be interpreted
pursuant to Art. 8 CISG.
15 Art. 1(1)(a) CISG sets forth that the CISG applies to the sales contract at hand as the
contracting
parties have their places of business in different states, which have ratified the CISG
(Proc. Order No. 2 § 42). The interpretation of the arbitration agreement is therefore subject to
the
CISG (OLG Stuttgart, 15 May 2006 (Germany); SCHMIDT-AHRENDTS p. 217).
16 Art. 8(1) CISG stipulates that statements and other conduct of a party are to be interpreted
according to its intent where the other party knew or could not have been unaware what that
intent
was. When determining this intent, consideration is to be given to the negotiations of the parties
when concluding the contract (Art. 8(3) CISG).
17 The original subject of the negotiations leading to the Contract was a potential sales contract
over 100 metric tons of coltan to be paid against open account (Resp. Exh. R 1 § 6).
RESPONDENT made clear that it would only agree on these conditions if Global Minerals
became a contracting party (ibid. § 7). Global Minerals, however, wanted to keep its business
separate from CLAIMANT’s business (Reply to Counterclaim § 5) and insisted – as in all
negotiations with every supplier and customer for the Equatorianian market (Proc. Order No. 2 §
7) – that it would not become a party to the Contract (Reply to Counterclaim § 6).
18 Hence, CLAIMANT agreed on less favourable conditions, inter alia, a smaller amount of
coltan and different payment method, provided that Global Minerals would not become a party to
the
Contract. (cf. Resp. Exh. R 1 § 7). Therefore, RESPONDENT could not have been unaware of
Global Minerals’ intent not to become a party to the Contract as defined by Art. 8(1) CISG.
RESPONDENT, rather, knew of this intent since it only mentioned CLAIMANT and
RESPONDENT as the only parties to the Contract in both letters of avoidance (Cl. Exh C 7;
Resp. Exh. R 4).
19 In consequence, Global Minerals is not a party to the Contract between CLAIMANT and
RESPONDENT and can therefore not automatically be bound by the arbitration agreement
contained
therein.
II. Global Minerals Is Not Bound by the Arbitration Clause by Virtue of Its Endorsement
20 The Tribunal is respectfully requested to find that Global Minerals is not bound to the
arbitration
clause due to its signature since the endorsement does not impose liability upon Global
Minerals (1.). Even if the endorsement constituted some sort of obligation, the endorsement
cannot extend the scope of the arbitration agreement to Global Minerals (2.).
1. The Endorsement Does Not Impose Liability Upon Global Minerals
21 Global Minerals is not bound to the arbitration agreement due to its signature as it merely
endorsed
the Contract but did not consent to arbitration.
22 Mr Storm’s signature under the Contract, reading “Endorsed for: Global Minerals”, was
merely
meant to “approve and support” (Oxford Dictionaries, “endorse”) the Contract and did not
create any
liability for Global Minerals. Such liability was rendered obsolete as the mere payment method
already provided sufficient security for RESPONDENT (a). As no security was needed directly
from
Global Minerals, the endorsement served the same purpose as a comfort letter (b). Last, a
reasonable businessperson would not have understood Global Minerals of having assumed
liability
through the endorsement (c).
a) The Payment Method Itself Rendered Liability of Global Minerals Obsolete
23 During the contract negotiations, RESPONDENT made clear that Global Minerals would
have to provide some sort of security (Resp. Exh. R 1 § 7). Multiple ways of doing so were
discussed
(Proc. Order No. 2 § 12). The parties, in the end, agreed on payment by a commercial letter of
credit by Global Minerals’ bank prior to RESPONDENT delivering the coltan (Resp. Exh. R 1 §
7; Proc. OrderNo. 2 § 12).
24 By issuing a commercial letter of credit, the issuing bank fulfils the payment obligations at
instruction of an applicant, which reassures the seller that he will receive the purchase price
(MCCURDY p. 543; cf. WIELE p. 81). It is irrelevant for the seller who the applicant is, as he
receives payment by the bank nonetheless (cf. MANN p. 402). Therefore, it only made sense for
RESPONDENT to attach no importance to Global Minerals’ exact legal status (Resp. Exh. R 1 §
7).
25 As RESPONDENTS payment claim was already sufficiently secured by the chosen payment
method itself, a direct involvement of Global Minerals through the endorsement was
unnecessary.